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The Apple iPadTrends and Statistics

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Apple iPad – Trends and Statistics

Apple’s iPad is redefining the future of not just mobile media, but alsocomputing devices in general. It has brought in a more enjoyable, intuitive and personal dimension to computing, and gives users the power to use it as a complete mobile computing device… to browse the Web, check and send emails, share and enjoy photos, watch videos in HD, play music, read eBooks, play games and much more, at just 0.5 inches thin and with a starting price of $499 (US) and £429 (UK).

Steve Job’s confidence is well-founded. In just over 4 months since its launch in April 2010, the iPad had already shipped ` and is thefastest ever consumer device to achieve $1 billion in sales. In tandem with the launch of the iPhone 4, Apple’s latest quarter (April – June) brought in profits of $3.25 billion, a full ten per cent higher than Wall Street analysts had beenexpecting.

In this report we outline the key trends that have emerged since the iPad launched three months ago, using statistics that were available mid August 2010. We will continue to monitor the iPad statistics and issue an updated trendreports quarterly.

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““People are loving iPad as it becomes a part of their daily lives. We’re working hard

to get this magical product into the hands of even more people around the world.” Steve Jobs, Apple CEO

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1According to a report by Morgan Stanley analyst Katy Huberty, the iPad is on track to become the world’s most popular mobile device, within just 3 months of its launch. Morgan Stanley projects sales of 16 million units in the first year alone. With over 3.3 million iPads sold in less than 3 months, that’s an argument hard to refute.

iPad is fast becoming the most popular mobile device

In the latest quarter (April to June), the iPad generated $2.17 billion in revenues, rep-resenting almost 14% of Apple’s total income for the period. “Revenues were driven primarily by the iPad” said Peter Oppenheimer, Apple’s chief financial officer.“That was out of nowhere,” says Brian Marshall, an analyst with Gleacher & Company, about the iPad’s numbers. “Phenomenal.”

According to Forrester’s Consumer Technographics surveys Awareness of the iPad is extremely highNearly 10 million US consumers say they either own or intend to buy an iPad

Resolve Market Research, the New Media research consulting firm, conducteda study on the impact of the iPad on other media and entertainment devices.According to the survey results, the No. 1 reason to own an iPad is: “It’s anentertaining and cool device.”

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The top reasons for wanting an iPad support the assertion: 56% — Entertainment

42% — Cool factor

40% — Convenience

28% — Brand (Apple)

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According to Yahoo’s recent survey on iPad users, most users are from the 30-54 age range (peaking in the 35-44 age group). Some reports suggest a relatively equal split male and female users although Yahoo found that males outnumber females 2:1 among current iPad users on Yahoo’s network.

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iPad on pace to become one of the most popular mobile devices in history, we believeCumulative Shipments Over First Two Years of Product History, Millions

After 12 MonthsiPod (Legacy): 0.4M iPhone: 6.1M Netbooks: 7.6M iPod Touch: 8.6M Nintendo DS: 8.8MIpad (Base Case): 13.0M Sony PSP: 14.5M iPad (Bull Case): 16.0M

Source: Company reports, Morgan Stanley Research

Source: Business Insider

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Yahoo also reported a high usage of Flickr, as well as Finance, News, and Sports sites with iPad users, and that 94% of iPad users are more likely to be affluent consumers with solid wealth and strong incomes.

iPad Users’ Age Indexed to Y! US Average

iPad Users’ Age Properties Visit: Penetration Rate Indexed to Y! US Average

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2 iPad is changing the rules of digital publishing

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“While it may not completely reinvent the rules of digital publishing in 2010, I have no doubt that within 18-24 months, you’ll begin to see the iPad have a major impact on the way both publishing houses and casual readers look at the digital publishing space, in which the gadget should provide a major boom in coming years.” Scott Steinberg, publisher and lead technology analyst,

Digital Trends

Increased browsing time Web based magazine viewing from desktop computers has traditionally been at a low of a few minutes a month. According to ComScore, the figures for GQ.com and Vanityfair.com are3.8 minutes and 2.1 minutes per month respectively. However, the same titles’ iPad Apps are seeing 60 minutes worth of online browsing.

Lou Cona, executive vice president at Condé Nast Media Group (publisher of the above titles) says that the iPad will, “redefine publishing and also redefine how advertisers connect with our audience”.

Scott Dadich of Wired magazine (also a Condé Nast title), agrees, “We’re looking to prove engagement in terms of hours, not minutes”. This is a staggering increase in viewing time and a major shift in online habits.

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Wired magazine has every reason to be confident. The magazine’s branded iPad app lets readers browse a magazine in the way they would a print copy but with additional video clips and graphics which can be activated with a finger swipe. With Wired’s iPad app priced at $4.99 an issue, more than 66,000 people had downloaded it after just a few weeks of sale compared to its hard copy average total of 82,000 newsstand copies per issue. It’s evident that the sales of Wired’s iPad edition will surpass the print edition in the second half of 2010.

The mammoth jump in viewing/reading time has been made possible because of the iPad’s unique features, which allows a well-designed iPad app to provide a much more interactive, immersive reader experience. John Gapper from the Financial Times Blog explains why Wired’s app, as just one example, is so impressive,

Increase in eBook sales The iPad has come to the market precisely at a time when eBooks (digital books) have finally come of age. Amazon.com, one of the largest booksellers globally, has just announced that for the last 3 months, eBook sales have been outnumbering sales of traditional hardcover books. In the last month alone, 180 digital books were sold for every 100 hardcover copies. This is in spite of the fact that Amazon’s eBook collection is just a small fraction of the millions of paper books sold on its website.

In the 3 months that the iPad has been on sale, readers bought more than 1.5 million books for the device from Apple’s online book store. According to ChangeWave Research, the iPad has already captured 16% of the eReader market, shooting past entrenched players like the Sony Reader (10%) and coming up at second place behind Amazon Kindle (62%), which it will soon overtake if current growth rates are maintained.

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“The most impressive thing about it is the way that it re-imagines the entire magazine format by integrating words, data, graphics, photos and video into a seamless blend. Even the advertisements, complete with videos, seem interesting.”

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How will iPad affect the publishing industry in the longer term? While that remains to be seen, we can draw parallels and conclusions from how the iPod and digital music affected the music industry. In 2007, physical sales represented 80% of all music sales

In 2010, physical sales represent just 64%

Digital sales increased 80% in these 3 years

Record stores are closing in record numbers

If these trends were replicated in the book publishing industry, in the next 2 years we may see over $20 billion wiped off the publishing industry’s annual sales figures.

The Telegraph’s Robert Colville says that, “the result might be a golden age for self-publishing, as authors market cheap eBooks directly to consumers. The only physical books that would make a profit, apart from the cheapest of paperbacks, would be super-deluxe collectors’ editions, sold in boutique stores and accompanied by personalized letters from the author.”

Custom-built iPad Apps can cost anything from £25k - £100K ($40K - $157K USD) but it’s now possible to purchase a branded iPad Reader App and self publish your publications into the App using an online publishing platform. This reduces the cost dramatically and there are numerous pricing models to suit different publishers and titles.

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3 iPad is becoming a major gaming platform

The iPad as a gaming console? Hardcore gamers might not warm to the idea, however no one thought that the iPhone would become a sensation in the gaming industry either. It’s therefore no surprise to see the iPad also become a major gaming platform. Here are some of the early winners:

Source: Kotaku.com

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High-quality games are taking advantage of the iPad’s superior hardware, and some of the top paid applications for iPad are currently ‘games apps’. According to app store analytics company Distimo, over a third of iPad-only apps are games, as canbe seen in the chart below:

Number of iPad Applications

Number of Applications Compatible with iPad Only

Source: NeuroSoftware

4 iPad is creating a netbook sales drop

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For the first time ever, just after the iPad launched in April, netbook sales growth declined with figures dropping by 13% (compared to a 25% Y-O-Y growth the previous month).

iPad/Tablets At Least Partially Responsible For Netbook Drop in AprilUS Retail PC Netbook Fundamentals

Source NPD, Morgan Stanley Research

Source: Business Insider

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5iPad apps are bringing in more revenue for developers and publishers

Many iPad apps are priced higher than their iPhone or iPod version. According to new research from app store analytics company Distimo, the average iPad app costs $4.67 compared to $3.87 for the average iPhone app. Because of a more optimised user experience and larger screen size, users are also willing to pay the higher price. Also, around 1% of iPad apps charge a monthly subscription instead of a one-off fee. This trend seems to indicate that people are quite willing to pay for a better user experience and added convenience.

Selling iPad Apps on the app Store enables publishers to harness the huge potential global audience in order to boost dwindling print circulation and generate additional profit.

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6 iPad Internet usage is at par with traditional PCs

Although there are ‘only’ 3.3 million iPads sold to date, the device’s share of the browser market globally is already larger than BlackBerry, Android and iPod Touch. According to Katy Huberty’s research report (Morgan Stanley), the iPad’s Internet usage is almost at par with traditional PCs despite it being classed as a mobile device.

iPad Internet usage closer to traditional PCs

Source: Company data, comScore, Gartner, Net Applications, Morgan Stanley Research

Source: Business Insider

The Morgan Stanley report shows that iPad Internet usage is closer to a PC than a smartphone, which is in part surprising, since users have traditionally preferred to browse the web from their computers. This trend reversal started with the iPhone, and now the iPad is close to turning the tables on PCs altogether.

Global Internet Browsing Share, 4/10 - 5/10

Source: Net Applications, Morgan Stanley

Source: Business Insider

TechCrunch have supported this finding with their recent blog reporting a surge in iPad browsing traffic to their website. In April 2010 they found that 1.15% of traffic came from iPads, the fifth most popular browsing device behind Windows machines, Macs, iPhones and Linux machines (surprisingly high given that device wasn’t even a month old). However, 4 months on and the iPad now accounts for 4.51% of TechCrunch traffic, having surged past Linux machines to become the fourth most popular OS, only behind Windows machines, Macs and iPhones.

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As well as internet browsing, the iPads’ large computer-like screen and lightweight portability is also ideal for the leisurely browsing of books, magazines, brochures and catalogues. Where these types of publications are contained within an iPad app they can also be read offline, even when there is no internet connection available.

1. Windows - 59.68%2. Mac - 27.78%3. iPhone - 5%4. Linux - 3.72%5. iPad - 1.18%

6. Android - 0.99%7. iPod - 0.67%8. (not set) - 0.54%9. BlackBerry - 0.28%10. SymbianOS - 0.07%

Tech Crunch percentages for April 2010:

1. Windows - 55.20%2. Mac - 26.88%3. iPhone - 6.13%4. iPad - 4.51%5. Linux - 3.38%

6. Android - 2.08%7. (not set) - 0.69%8. iPod - 0.60%9. BlackBerry - 0.37%10. SymbianOS - 0.08%

TechCruch latest figures (mid July - mid Aug 2010)

Based on these numbers, it’s clear that the iPad is eating into both Windows and Mac internet browsing share.

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7 iPad is being adopted for commercial applications

Whilst many people believe the iPad is a more entertainment focused device, its adoption is already underway by leading corporations. 50% of the Fortune 100 are now testing and evaluating the iPad - even conservative companies like SAP, Tellabs, Daimler’s Mercedes-Benz and Wells-Fargo are adopting the iPad in order to make workers more productive without risking the security of sensitive customer information.

The degree to which corporate perceptions are changing is evident by the fact that Wells Fargo bank spent 2 years studying the iPhone before allowing its employees to use it for work. The iPad, on the contrary, took just weeks to get cleared. A Zogby International survey shows that more than half of American smartphone users would use the iPad or a similar device for work if they could.

The most popular iPad apps for corporate users, according to ZDNet Asia, are WebEx for iPad (Free) LogMeIn Ignition (US$29.99) MobileIron Sentry (Free) Office2 HD (US$7.99) Dropbox (Free)

The iPad is also an ideal device to view corporate or promotional literature. Branded Apps housing brochures, product catalogs, maintenance guides and manuals and other publications are an ideal way to communicate with customers and prospects and help build brands. The iPad allows for a more customer interaction on a more intimate level and can work as another touch point in any digital strategy.

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8 iPad provides higher conversion rates in eCommerce

According to Shopatron, a global provider of eCommerce solutions for consumer goods manufacturers, sales conversion rates for iPad are much higher than for the other mobile devices.

These findings are based on conversion rates analysis from over 800 branded stores on the Shopatron platform, throughout 35 industries. The average conversion rate from mobile devices like the iPhone, iPod and Android is around 0.37%. The conversion rate for the iPad, by contrast, is 5.5 times more, an average of 2.04%.

Shopatron believes that the conversion rates are higher on iPad because of a “much richer shopping experience with its large screen real-estate and fast connection speeds”.

Companies can publish their digital catalogs into iPad Apps in much the same way you can a brochure, book or magazine, enabling users to click and buy direct from the iPad. As well as a marketing tool that drives traffic to eCommerce websites, these findings suggest that there’s more likely to be a higher sales conversion rate from a catalog on an iPad than on other mobile devices.

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Conclusion

The iPad is defying assumptions to such an extent it even took leading technology market research firm Forrester by surprise, so much so that they are now planning to significantly revise upward their original forecast for the tablet computer market. ABI Research also says that it “has revisited its forecasts, almost tripling the original estimate to reach about 11 million tablets expected to ship by the end of 2010...based on the broader availability of the iPad.” Market research firm iSuppli is even more optimistic in its outlook. “iSuppli now predicts Apple will ship 12.9 million iPads in 2010, an increase from the previous forecast issued April 2nd of 7.1 million units.” The trends are clear. The iPad is a global phenomenon that is already revolutionizing online reading, browsing and viewing habits and also providing highest conversion rates for mobile eCommerce. Just like the iPod overturned the established order in the music industry, the iPad is threatening to disrupt a few industries of its own, especially the gaming and publishing industries.

As the iPad TV ad concludes, “It’s already a revolution, and it’s only just begun.”

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“The iPad is “defying common assumptions about consumer technology adoption”

Sarah Rotman Epps, Analyst at Forrester Research

Robert EldingMarketing Director

YUDU Mediawww.yudupro.com

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